property

Usually when individuals think of investing their hard earned money they think of gold jewellery, private/ public bonds, fixed deposits and probably a second home. The ones with a slightly higher risk appetite go so far as to invest in equities, stocks or mutual funds. In both cases the thought process is to generate a decent ROI (return on investment) whilst creating a steady income by way of accrued interest that serves the investor as a supplementary revenue or a nest egg during times of need or emergencies, as the case may be. However, most investors fail to realise that after calculating inflation and taxes, the final amount remaining in the hands of the investor is perhaps not enough or probably not as per his/ her expectations to fulfil all his needs, thereby creating a big, glaring shortfall between his actual requirement and the final realised amount.

So what should an average investor do in such a scenario? Especially considering that inflation will not show any signs of abatement and neither are his personal needs going to reduce.

In this case many families and like-minded investors have found recourse in the investment of plots of land. Why, you may ask? Because, quite simply, it has shown to generate phenomenal wealth in the past and likewise will continue to do so in the future too.

Take a look at some of the arguments that support investments in plots of land

Versatile and high return yielding. What’s not to like?

A plot of land is a versatile investment that you can use as per your current requirement in life. For instance, say you have invested in a plot a considerable while ago and require funds for some urgent need now, you can choose to dispose off a part of the plot and retain the rest for posterity.

Yes, it is true that plot sales don’t offer instant liquidity like a fixed deposit or a mutual fund does, do remember that the returns of a plot sale are phenomenal and more than compensate for the lack of immediate liquidity.

In fact recent statistics and reports suggest that land has been the only asset that has proved to be immensely valuable. In real terms, plots and land values have increased over 800% in the last 23 years.

It’s as versatile as you

Say you have built a house on the plot and perhaps, with the addition of a new family member, require building an additional room; you can do so without worry. The only cost that would be incurred is that of construction and permissions.

Many investors have found that building a house and renting it out as a holiday home is also beneficial, as it can be used for personal purposes as and when needed and given out to others for short periods as a holiday/ weekend home.

Appreciation and Acquisition Cost

Purchasing a plot of land is quite reasonable as compared purchasing a flat. What’s more, the property tax is the hidden gem amongst all the virtues of plots. Reason being that property tax paid on plots is lesser than what would normally have been paid on a flat.

Pure profits

Consider the costs that an inhabitant/ plot owner would normally incur in the maintenance of the plots and compare it to the charges and common area maintenance (CAM) charges that you’d be expected to pay in a flat and you’ll find that economically and monetarily wise the value of a flat doesn’t hold a candle to the advantages of a plot.

Besides, do remember that land is a priceless commodity that commands a premium no matter what day, age or generation we are living in. That, and the fact that there is only this much of limited land available now!